When Rahul Singhvi took over Novavax Inc. last August, the drugmaker had less than $5 million and was losing money on its biggest product. Within days he decided to bet on an experimental bird-flu vaccine.
The gamble is paying off for Novavax, which was based in Columbia until it moved to Malvern, Pa., in 2004, and still does much of its bird-flu work in Rockville. The company has raised $38 million after changing its focus and the stock has jumped eightfold since Singhvi, 41, became chief executive officer. Novavax's most recent financing included $12.5 million from Kleiner Perkins Caufield & Byers, the Silicon Valley venture capital firm that backed Google Inc. and Genentech Inc.
Drugmakers such as Sanofi-Aventis SA and Chiron Corp. are racing to prepare for a possible pandemic as the avian influenza virus has spread from Asia to Europe, Africa and the Middle East, killing at least 98 people. Winning support from Kleiner Perkins sets Novavax apart from other small vaccine developers such as Vical Inc. and Avant Immunotherapeutics Inc., said Ken Trbovich, an analyst at RBC Capital Markets. He rates Novavax shares "sector perform" and doesn't own the stock.
The company's bird-flu funding includes $1.6 million from the National Institutes of Health. The U.S. is investing in research technology, such as that being developed at Novavax, to break away from the limitations of the current method of growing flu vaccine in eggs.
The egg-growing approach involves a 50-year-old process that can take months to produce a batch of vaccine, said Dr. Anthony S. Fauci, director of the National Institute of Allergy and Infectious Diseases in Bethesda.
"We're trying to have alternative ways of developing influenza vaccine," Fauci said.
Novavax also is working with researchers at the University of Pittsburgh, where more than 50 years ago Jonas Salk discovered the polio vaccine. Through the Pitt collaboration, scientists are testing Novavax's vaccines in animals.
The vaccine is grown in cells instead of eggs, making it easier to produce in large amounts, said Ted Ross, an assistant professor at Pitt, who is leading the university research. Egg-based flu shots take as long as a year to turn out after a strain of influenza is identified as a threat, he said.
"Within six months, a product could be on the market" using the new technique, Ross said. "That's faster than what we have now."
